Commonwealth Bank boss Ian Narev has apologised to more than 1,100 customers who lost savings as a result of fraudulent and misleading behaviour by financial advisers.

Speaking for the first time since a Senate committee last week called for a royal commission into the scandal, Mr Narev said their behaviour was unacceptable.

“We know this is unacceptable and I unreservedly apologise to all customers affected,” he said in a statement on Thursday.

“Poor advice provided by some of our advisers between 2003 to 2012 caused financial loss and distress and I am truly sorry for that.”

Mr Narev said the bank was setting up an open advice review program in an attempt to prevent a repeat of the scandal.

[Financial planners] failed in their primary obligation – to act in the best interests of our customers

The program will allow any customer who received bad advice from the financial planners at the heart of the scandal between 2003 and 2012 to have their cases reviewed.

It will also oversee an in-house review by the bank into the advice its financial planners gave to customers during that period.

Commonwealth Bank has so far paid out $52 million in compensation to affected customers.

Mr Narev said it was disturbing that some planners at the bank’s Commonwealth Financial Planning (CFP) and Financial Wisdom (FWL) businesses had breached customers’ trust.

“They failed in their primary obligation – to act in the best interests of our customers,” he said.

Mr Narev said the review program would allow CFP and FWL customers to have the advice they received from financial planners reviewed and assessed by an independent advocate.

His apology and details of the review come a week after a Senate committee report criticised the bank and the corporate regulator for their handling of the scandal.

The committee investigated unethical dealings by CFP advisers between 2006 and 2010 as part of a year-long investigation into the performance of the Australian Securities and Investments Commission (ASIC).

The investigation included an examination of ASIC’s slow response to whistleblowers inside the bank who alerted the regulator to some advisers’ misleading and deceptive conduct.

Mr Narev said the committee had looked at events during the global financial crisis, a time when even well-advised people were losing money on investments.

He described as “complicated” the bank’s process of compensating customers who received bad advice.

But, he said, the aim had been to “put customers back in the position they would have been had they received suitable advice”.

Mr Narev said the bank had transformed its financial planning businesses by making changes to management, systems and culture to ensure they provided quality advice.

“However, I acknowledge there are views among some customers, and indeed in the Senate report released last week, that our approach has not been sufficient for all our customers,” he said.

“We have listened carefully and this program is a direct response to those concerns.”

Abbott’s calls for action – not reviews

While the government has so far appeared reluctant to set up a royal commission into the scandal, Labor is continuing to demand Treasurer Joe Hockey consider establishing one.

“The government should be giving proper consideration to sponsoring an independent inquiry, including a royal commission,” Mr Bowen said.

But speaking after Mr Narev’s press conference, Prime Minister Tony Abbott said he wouldn’t be rushed into a further inquiry of the scandal surrounding Commonwealth Bank financial advisers which has caused thousands of investors to lose their savings.

Instead, he wanted to first consider a parliamentary report on the issue.

Mum and dad investors needed to be protected, Mr Abbott said on Thursday, but there also needed to be maintenance of a market where inevitably people do face a certain amount of risk.

“I don’t want to overdo the reviews because in the end, what people expect from government is appropriate action not endless study, particularly studies which don’t necessarily lead to outcomes,” he said.